Disposition
Understand disposition in Canadian real estate - what it means, when it happens, and how it affects ownership, taxes, and estate planning.
June 06, 2025
What is a Disposition?
Disposition in real estate refers to the sale, transfer, or disposal of a property or asset by the owner, whether voluntarily or through legal or financial obligation.
Why Dispositions Matter in Real Estate
In Canadian real estate, disposition is a key event that can trigger capital gains tax and mark the end of property ownership.
Disposition includes:
- Selling a property
- Gifting or transferring to a family member
- Foreclosure or expropriation
- Change in use from personal to rental or vice versa
The Canada Revenue Agency (CRA) requires that any disposition of property be reported, with capital gains calculated using the adjusted cost base.
Understanding disposition is essential for estate planning, tax reporting, and assessing legal or financial impacts of property sales.
Example of a Disposition in Action
When a homeowner sells a vacation property, it is considered a disposition, and they must report the capital gain to the CRA.
Key Takeaways
- Occurs when property is sold or transferred
- Can be voluntary or court-mandated
- Triggers capital gains tax for non-principal residences
- Must be reported to the CRA
- Relevant for sales, gifts, and estate plans
Related Terms
- Adjusted Cost Base
- Capital Gains Tax
- Legal Title
- Transfer of Ownership
- Estate Planning
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)